The enchantment of dividend stocks for me is the prospect of a stream of passive revenue with out having to carry a finger. Some of the most important and best-known FTSE 100 firms are beneficiant dividend payers. Here are two FTSE dividend stocks to buy now for my portfolio.British (*2*) TobaccoThe economics of tobacco are fairly easy. As it’s an addictive product, producers are in a position to enhance costs. Declines in smoking in some international locations are decreasing demand, however the complete market stays enormous. Input prices are low and there are restricted progress alternatives during which a producer can reinvest earnings.That implies that an organization like British (*2*) Tobacco (LSE: BATS) is ready to generate important free money flows. It can use them to fund massive dividend funds. Last yr, the corporate generated £2.6n of free money circulate even after paying dividends of £4.7bn. At the present share worth, the BAT yield is 7.6%. With a yield like that, it’s on my listing of FTSE dividend stocks to buy now.Is the BAT dividend secure?Not solely does BAT have one of many highest yields amongst FTSE shares, it additionally has a powerful document of accelerating its payout every year for greater than twenty years. This yr the dividend grew by 2.5%. That isn’t an enormous enhance, however it’s not negligible both. Over time, such will increase can compound considerably.But will BAT proceed rising its dividend in future? Indeed, will it even pay a dividend in any respect? Risks resembling regulatory compliance prices and falling demand for cigarettes might eat into free money circulate. The firm additionally has to service substantial debt – final yr’s £4.7bn of dividend prices was really a lot lower than BAT spent on debt. Not solely did the corporate pay curiosity of £1.7bn, it additionally spent £10.6bn decreasing and repaying borrowings.The firm targets a dividend equal to 65% of adjusted diluted earnings per share. If adjusted diluted earnings fall, the dividend might thus fall. The firm’s progressive dividend historical past supplies no assurance of future dividend will increase. Bearing these dangers in thoughts, nonetheless, I nonetheless think about BAT as among the finest FTSE dividend stocks to buy now for my portfolio.Story continuesBest FTSE dividend stocks to buy now: Legal & GeneralOn my listing of FTSE dividend stocks to buy now for my portfolio, I might additionally embrace Legal & General. Its dedication to dividends was examined final yr, when opponents resembling Aviva suspended dividends. By distinction, Legal & General saved paying. While Aviva went on to lower its dividend, Legal & General has set out its plans for coming years, together with a progressive dividend coverage.Yielding 6.6%, the shares supply my portfolio extra publicity to the monetary companies sector. That has dangers. Any downturn within the financial system might have an effect on demand for monetary companies merchandise, main to falling income. Insurance pricing tends to be cyclical, which is a threat to Legal & General’s earnings when the following downward part within the cycle begins.But I like its well-known model, its extensive buyer base, and a yield in extra of most FTSE 100 firms. That’s why Legal & General is on my listing of FTSE dividend stocks to think about for my portfolio proper now.The put up 2 FTSE dividend stocks to buy now appeared first on The Motley Fool UK.More readingChristopher Ruane owns shares in British (*2*) Tobacco. The Motley Fool UK has really useful British (*2*) Tobacco. Views expressed on the businesses talked about on this article are these of the author and subsequently might differ from the official suggestions we make in our subscription companies resembling Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we consider that contemplating a various vary of insights makes us higher traders.Motley Fool UK 2021
2 FTSE dividend stocks to buy now
